For students in Lehigh’s College of Business and Economics, it’s one thing to read about financial reporting practices in a textbook.
It’s quite another to hear about them directly from an industry leader and arbiter of those very same reporting practices.
This week, students in Lehigh’s accounting program heard a talk by Robert Herz, former chairman of the Financial Accounting Standards Board (FASB) and an international policy maker. Herz was this year’s distinguished speaker in the Segal Speakers Series, which was established in 2003 by William N. Segal and Andrew P. Segal ’67 to bring accounting leaders to campus to talk with students and faculty.
An international perspective
Herz grew up in New Jersey but lived and worked in England and Argentina before his eight-year stint as chairman of the FASB. It was these experiences abroad that afforded him an appreciation of the nuances of international accounting. Throughout his talk, Herz stressed the importance of developing a global perspective, a priority shared by Lehigh’s CBE.
Herz spoke with students about the challenges and opportunities facing financial reporting in the United States and globally. Specifically, he described the process of the FASB and the International Accounting Standards Board (IASB) working collaboratively over the past 10 years on convergence: developing one set of international reporting standards.
He spoke at length about the rationale behind international convergence, namely the continuing globalization of investing, mergers and acquisitions, trade, and major corporations; the complexity and confusion arising from different accounting languages; and the growing use and acceptance of International Financial Reporting Standards (IFRS).
Herz said that his time as a chartered accountant in the U.K. helped him better understand the resistance to one set of global reporting standards.
“Different rules suit different environments,” Herz said. “What worked in the U.K. wouldn’t have worked here in the United States.”
Ultimately, Herz said, the resistance amounted to simple human nature.
“Human beings do not always embrace change enthusiastically,” he said.
Herz also talked about the importance of technology in financial reporting and offered his thoughts on accounting and auditing education.
Prior to his public talk, Herz spoke with accounting graduate students in Lehigh’s “International Financial Reporting Standards” class. Parveen Gupta, chair and professor of accounting, said it is important for students to hear directly from industry insiders like Herz.
“Listening to practitioner perspectives helps students see the real-life relevance of the problems and issues being discussed in the classroom and in textbooks,” Gupta said. “This allows students to better appreciate and absorb what they are learning in their classes.”
Gupta also said that infusing accounting coursework with an international perspective is key.
“The world of accounting has become truly global,” Gupta said. “Accounting students who aspire to lead in this interconnected world must start demonstrating comprehension and understanding of the global issues and challenges facing the accounting profession during their college years.”